House oversight opens probe into prescription prices

Jan. 14 (UPI) -- The House oversight committee requested information from 12 prescription drug companies Monday in what Chairman Rep. Elijah Cummings called the most wide-ranging probe into drug pricing in decades.

The House Committee on Oversight and Reform sent letters to the companies requesting information about how they price their drugs, including a history of increases, investments in research and development, and strategies to preserve market share and pricing power.

"For years, drug companies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits," Cummings, a Democrat from Maryland, wrote. "The goals of this investigation are to determine why drug companies are increasing prices so dramatically, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.

The drug-pricing probe is one area in which Democrats' priorities align with President Donald Trump's.

In October 2017, Trump told his Cabinet that drug companies "are getting away with murder" with high prices in the United States.

"Because [other countries are] setting such low prices that we're actually subsidizing other countries, and that's just not going to happen anymore," he said.

The Trump administration has sought to drive competition among pharmaceutical companies by advancing biosimilars and generic drugs, and reducing regulatory burdens and "middlemen," third-party pharmacy benefit managers who negotiate between pharmacies and drug manufacturers on prices and discounts.

In October, he signed a pair of bills lifting so-called gag orders that prevent pharmacists from telling customers how to save money on their prescription drugs.

Bowing to pressure from the Trump administration, at least one company, Pfizer, canceled plans in July to raise the prices on dozens of drugs. Pfizer announced a reversal of that decision in November.

The oversight committee cited a report from the Centers for Medicare and Medicaid Services that said spending on prescription drugs will increase more rapidly than spending on any other sectors of healthcare over the next decade. The Inspector General of the Department of Health and Human Services determined that 10 of the most expensive brand-name drugs account for $15.6 billion of spending under Medicaid Part D.

Meanwhile, a March 2018 report from the Senate Committee on Homeland Security and Governmental Affairs said the price of seniors' most used brand-name drugs are increasing at 10 times the rate of inflation.

"Research and development efforts on groundbreaking medications have made immeasurable contributions to the health of Americans, including new treatments and cures for diseases that have affected people for centuries," Cummings continued. "But the ongoing escalation of prices by drug companies is unsustainable."

The prescription drug prices probe was one of a number of new investigations announced last week by the oversight committee under the new Democratic-controlled House. Cummings also announced Trump's personal lawyer, Michael Cohen, agreed to testify before the panel in February.